MR. DAVID GREGORY: This Sunday, down to the wire on the debt limit. President Obama and congressional leaders huddle together today in a rare Sunday session to hammer out a deal, while both sides are staking their ground.

REP. NANCY PELOSI (D-CA): We do not support cuts in benefits on -- for Social Security and Medicare.

REP. JOHN BOEHNER (R-OH): We are not going to raise taxes on the American people.

MR. GREGORY: At the same time, new reason to question whether the recession is really over. A dismal jobs report puts the president on the defensive.

PRES. BARACK OBAMA: We've always known that we'd have ups and downs on our way back from this recession, and over the past few months, the economy's experienced some tough headwinds.

MR. GREGORY: This morning we're going to have the very latest on the ongoing debt talks with the president's economic point man, Treasury Secretary Tim Geithner. Then our Meet the Candidates series continues.

FMR. GOV. TIM PAWLENTY (R-MN): President Obama has duped this country. He came through Iowa and other places and made all these big promises, and he's broken or left most of them unfulfilled.

MR. GREGORY: He was a two-term Republican governor of Minnesota. Now he has his sights set on the White House. After some early missteps and missed opportunities, can he boost his poll numbers and raise the money to break through the still unsettled Republican field? GOP presidential hopeful Tim Pawlenty joins me live in studio. Plus, what the debt debate means politically for Republicans in 2012, and the president's own re-election effort. Analysis this morning from Eugene Robinson of The Washington Post and NBC News chief White House correspondent and political director Chuck Todd.

Announcer: From NBC News in Washington, MEET THE PRESS with David Gregory.

MR. GREGORY: Good morning. Breaking news in Washington's effort to reach a debt reduction deal, Speaker of the House John Boehner issuing a surprising statement last night abandoning efforts to reach a far-reaching $4 trillion deficit reduction plan. This is what he said, " The White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure..." The rare Sunday negotiating session with the president will continue as planned later today. Joining me now live this morning for the very latest, the secretary of the Treasury, Tim Geithner. Mr. Secretary, welcome back.

SEC'Y TIMOTHY GEITHNER: Nice to see you, David.

MR. GREGORY: What happened?

SEC'Y GEITHNER: Well, this is hard. You know, it's politically very hard. But this is a grave moment for the country, and we need to do something very big, very substantial to bring our long-term deficits down over time. We have to do that in a way that's good for the economy, so we give more support to this economy that's still healing from the great recession. And it's going to require both sides to compromise. The president's bringing leaders together again at the White House this evening to try to figure out how, how to move forward. But it's going to take...

MR. GREGORY: So what does he actually say, though? Because it -- you're hearing two different things. You hear Boehner saying, "Look, they're demanding tax increases, we're not going to do that." They've also said that you were backpedaling a bit on whether you'd cut entitlement programs like Medicare or Social Security. What's, what's the fact?

SEC'Y GEITHNER: That latter, that latter thing is not true. The president is standing tough, he is willing to do very, very difficult political things.

MR. GREGORY: Like what on Medicare?

SEC'Y GEITHNER: Like getting very substantial savings from the budget across the budget, defense, the rest of the government. Even Medicare, Medicaid, over the long-term, there are things we can do responsibly to save money in those programs. And we have to do that if we're going to bring these deficits under control. But to do that we have to have some shared sacrifice. We have to find a way to avoid shifting more of the burden in the tax system to the middle class. It's going to take a balanced approach. Both sides are going to have to make some compromises. And, and, you know, just one thing to Republicans, we know this is very hard to do, but they should not walk away now from trying to do something good for the country. This is very important for the country now. For the economy to be growing long-term, restore confidence that Washington can actually do things and solve some problems, you need both sides to come together now.

MR. GREGORY: What was the president's reaction to Boehner's move?

SEC'Y GEITHNER: Well, you know, the president wants to do the right thing for the country, and he recognizes that to do the right thing you have to try and do the biggest, most substantial deal possible, the deal that's going to be best for the economy. And, you know, his view is, "We're going to keep at it." He's going to bring people together, and we're going to keep trying to push people to find areas for compromise. That's the thing presidents have to do. That's what the leaders in the House and the Senate have to do.

MR. GREGORY: So you think a grand bargain, the big deal that the president is pursuing, $4 trillion in cuts over 10 years, is it still possible, or is it dead?

SEC'Y GEITHNER: Well, we're going to try to get the biggest deal possible, the deal that's best for the economy. Not just in the short-term; things that'll help make sure that Americans get some tax relief they need right now, like extending the payroll tax cut, which is about $1,000 for the average family, but also things that'll help make sure we have room to invest in our future and help bring those long-term deficits down over time.

MR. GREGORY: But let me understand a couple of bottom lines. Does a tax increase, some kind of revenue increase, have to be part of this deal, from the White House point of view?

SEC'Y GEITHNER: You have to have balance in the package for it to work. That's true economically; it's absolutely true politically. And let me explain why. Republicans have told us from the beginning they can't pass a debt limit increase, they can't pass a budget deal just with Republican votes. They need Democratic votes. It's going to take Democrats and Republicans in both houses to do something. That's the reason why politically you have to have balance in the deal. Economically you need to have balance in the deal because if you try to reduce our long-term deficits without doing sensible tax reforms that close loopholes, you know, avoid shifting the burden to the middle class, then you have to do very, very deep cuts in core functional government, benefits that the elderly depend on. That's unfair, it would be bad for the economy long-term, we can't do that.

MR. GREGORY: All right, but let me pin you down on that point because Medicare and Social Security cuts, adjustments, all of those are still on the table according to White House officials. You know Democrats have been resisting this hard. The leader of the Democrats in the House, Nancy Pelosi, came out on Thursday and said the following.

REP. PELOSI: We are not going to balance the budget on the backs of America's seniors, women, and people with disabilities.

MR. GREGORY: Be clear about this, Mr. Secretary: Is the president willing to cut Medicare benefits in order to get this deal?

SEC'Y GEITHNER: The president is willing, he said this from the beginning, as part of a balanced, long-term budget agreement that gets our arms around this problem, brings this deficit down over, down over time in a balanced way, we have to try to find ways to get more savings across the government, including...

MR. GREGORY: No, but I'm asking you a specific question.

SEC'Y GEITHNER: No, including Medicare and Medicaid.

MR. GREGORY: You said that before. OK, but what...

SEC'Y GEITHNER: And our, and our...

MR. GREGORY: ... what would you do on Medicare?

SEC'Y GEITHNER: We, we will find ways, and we proposed very specific things in these talks that to get more savings in this program, but what we're not going to do is do this in a way that shifts more of the burden...

MR. GREGORY: I get it. But...

SEC'Y GEITHNER: ...to the middle class Americans.

MR. GREGORY: ...cutting benefits or not cutting benefits?

SEC'Y GEITHNER: We're, we're going to find the most sensible ways to get more savings for those programs without adding to the, to the burdens on middle class families and the elderly that they face today. But -- yeah, well...

MR. GREGORY: But I -- you're not really saying anything there because you either cut benefits or you don't, or you means test or you don't, or you raise the retirement age or you don't.

SEC'Y GEITHNER: David, I'm -- I don't get to negotiate that with you. It would be fun, maybe we could work it out. And I'm not going to tell you what a deal's going to have to require in the end. But I'll tell you the, the following important things. Democrats and this president are willing to do very hard things politically, but only as part of a deal that's balanced. And let me explain why. Why is it fair to ask elderly Americans, middle class families, to take more of the burden if those savings are going to go to sustain special interest tax breaks, tax -- the lowest tax rates for the most fortunate Americans we've seen in 50 years? Why is that fair? Another thing for Republicans, Republicans understandably are uncomfortable raising revenues, even on the, even on the richest Americans. And they want to be confident that if they're going to do that, those revenues we, we raise go to reduce our long-term deficits, not sustaining programs we can't afford. That's why we have the opportunity now to do something very important and very big because it's more reasonable for people to say now that as part of a long-term deal, reduce these deficits with a shared sacrifice, you can do something good.

MR. GREGORY: All right, two more on this. Do you think you have to step back and say, "We, we could go for a smaller deal here, maybe half as big as we were talking about"? That's what the Biden group -- the vice president was brokering a group to do that. Is that where we are now?

SEC'Y GEITHNER: You know, a -- small deals are very tough too, because it requires very difficult reforms, savings, cuts in things people depend on that matter. Very hard to do a small deal too. Obviously, we have to do something that's -- we have to find a way to pass an agreement. But the president's going to keep working towards the largest possible deal we can do because that's the right thing for our country.

MR. GREGORY: All right, now, the specific consequences of inaction and potential default, that August 2 date is coming. You know, this is a big issue not only in Congress, but also among those running for president or perhaps running for president. Sarah Palin gave an interview to Newsweek, and she says, "Look, this debt limit business, this is not the apocalypse here." I'm asking you, specific consequences to the United States of getting to August 2 without raising the debt limit.

SEC'Y GEITHNER: Let me make this clear, David. The United States is not going to default. We are a country that pays its bills. We're going to meet our obligations. And the leadership in Congress, Republicans and Democrats, House and Senate, understand that. Speaker Boehner, to his credit, said from the beginning we are not going to default as a country because he understands it would be catastrophic for the American economy. So let me explain what happens. The longer we go into July, the more risk there will be in financial markets, more concern the risk that America cannot get its act together to figure out how to solve this problem. And you'll see that reflected in higher interest rates and more concerned loss of confidence. And let me explain what happens on August 2. On August 2, at that point we run out of the ability to borrow to meet our obligations. Remember, we spend -- we have to borrow now 40 cents for every dollar we spend. Now, on August 2, if Congress hasn't acted, we're left with the cash we have and the cash we're going to take in. And every week starting the week of August 2, we have to go out and finance roughly $100 billion in maturing obligations of the government. We make 80 million checks a month to Americans, 55 million people on Social Security benefits, millions more Americans on veterans benefits, Medicare, Medicaid, people who supply our troops in combat. Eighty million checks a month. So on August 2, we're left with the cash on hand and the cash we take in. And we have to convince people to come and refinance $500 billion in maturing principal payments that come due in August.

MR. GREGORY: Does that affect our credit rating potentially?

SEC'Y GEITHNER: Absolutely. And for that reason the credit rating agencies around the world have said if Congress doesn't act by the 2nd they will put our -- they will downgrade our credit, first time in history, and if that happens, you're going to see catastrophic damage across the American economy and across the global economy. It's not something we -- failure is not an option and the leaders to their credit -- the leaders to their credit understand this.

MR. GREGORY: But that's a...

SEC'Y GEITHNER: And let me just say...

MR. GREGORY: Yeah.

SEC'Y GEITHNER: ...there is no credible way to give Congress more time. There's no constitutional option. There's no delay option. There's no creative financial option. They have to act by the 2nd.

MR. GREGORY: It's a significant consequence that you're outlining here that America's credit rating could be downgraded without a deal by August 2nd.

SEC'Y GEITHNER: And it's much worse than that. Again, just remember, that, that itself would be very damaging...

MR. GREGORY: Mm-hmm.

SEC'Y GEITHNER: ...because that will affect the cost of cost......for all Americans, the value of all American savings, the capacity of businesses to borrow to put people more back to work. But remember, 80 million checks a month we write, including people who depend on those checks to go out and buy food to meet their basic needs.

MR. GREGORY: Who would you pick first?

SEC'Y GEITHNER: This is not a -- this...

MR. GREGORY: Would you have to make that decision?

SEC'Y GEITHNER: There's no alternative for Congress to act by the 2nd, and they recognize it, and I'm very confident they're going to do that. I think what we're debating, David, is not really that. What we're debating is, can we take advantage of this moment, of this opportunity, grave moment facing the nation to try to get our arms around those long-term fiscal problems in a way that is good for the economy.

MR. GREGORY: Talking about what's good for the economy, a lot of this discussion about debt is ultimately to free up space for jobs to be created. It's not happening. People are still out of work. Here's the chart of the president's economic record. This is based on government information, Treasury Department, U.S. Bureau of Labor Stats. Unemployment 7.3 percent Inauguration Day. Up to 9.2 percent with the latest report. Up 26 percent. You see the debt figures up 35 percent.

SEC'Y GEITHNER: Well, David, that's a -- let me just say that's a ridiculous table. If you step back and you look at what's happening to the American economy-- remember, when the president took office we were losing 3/4 of a million jobs a month, the economy was declining at an annual rate of 5 percent. Worst economic storm than we've seen since the Great Depression. In fact, Greenspan and Bernanke and others have said a greater shock than what precipitated the Great Depression. Now, the president acted, took a lot of political risk, did very unpopular things, but the economy started growing again within six months. We've had more than two million jobs created in the private sector since job growth resumed again. America is in a stronger position today, but we're not growing fast enough.

MR. GREGORY: All right, but hold on. You're not...

SEC'Y GEITHNER: We're not growing fast enough...

MR. GREGORY: You're certainly not disputing those numbers. And this is what happened with the jobs report this week. The New York Times described it this way. "Feeble Job Numbers Show Recovery Starting To Stall. For the second consecutive month, employers added scarcely any jobs in June, startling evidence that the economic recovery is stumbling." Basically, what you're saying, Mr. Secretary, it could have been a lot worse.

SEC'Y GEITHNER: No.

MR. GREGORY: It was really bad. My question is, has the recovery stalled?

SEC'Y GEITHNER: The, the economy absolutely slowed in the first half of the year. There's no doubt on that. And when the economy slows, job creation will slow, and that's what's happening. It slowed because, as you know, gas prices went up a lot because we had a huge supply disruption in the Mideast. You saw some really terrible weather across the country which slowed construction spending. State and local governments across the country are having to cut back, tighten their belts. You saw Japan suffer catastrophic damage. A lot of concern out of Europe still. And those factors together account for a large part of the slowdown. Not all of it, but a large part of it.

MR. GREGORY: All right, but is the, is the economy recovering still?

SEC'Y GEITHNER: Well, I, I think most people if you, if you look at what most business economists say about the economy today, they still believe the economy is going to strength in the second half and strengthen into next year. But, you know, our job is to make sure -- it's not fast enough now.

MR. GREGORY: Mm-hmm.

SEC'Y GEITHNER: We still have millions and millions of Americans out of work, and the most important thing we can do is to make sure we're taking steps to get people back to work as quickly as we can.

MR. GREGORY: Well, let me ask you this. The president was asked in his Twitter town hall about the economy and whether mistakes were made. And I want to show you a portion of what he said.

PRES. OBAMA: So I think people may not have been prepared for how long this was going to take and why we were going to have to make some very difficult decisions and choices. And, and I take responsibility for that because, you know, setting people's expectations is part of how you end up being able to respond well.

MR. GREGORY: How did the president not prepare the American people well enough? You're his top economic adviser, Larry Summers was there. Did you guys get it wrong? Did you not tell him how bad it was?

SEC'Y GEITHNER: I think he's being too hard on himself, David. I think everybody understood, and we were very careful in the beginning to make sure people understood how grave this was and how difficult it was going to be to fix. You know, this took a long time to build up, the problems that caused the crisis. It's going to take time to fix. Just think of it this way. This was a crisis caused in part because Americans borrowed too much, banks took on too much risk. They -- we built too many homes, more than we could afford. We were living beyond our means for a long period of time. And part of what makes this so hard, part of what makes the recovery slower is because people are going back to living within their means. They're spending less of their share of income, they're saving more. And we don't have the ability, because of the overhang in housing and the problems in the financial system, to do -- to engineer artificially...

MR. GREGORY: So in other words it's unfair to demand...

SEC'Y GEITHNER: ...a stronger recovery.

MR. GREGORY: ...accountability for this president and this administration for the, the fate of the economy?

SEC'Y GEITHNER: No, no. Of course. The -- ultimately presidents are judged on...

MR. GREGORY: Right. OK, but Mr. Secretary, if that's the case, look, you guys have had some big swings at the plate. You had stimulus, right? We were told that was going to keep unemployment to 8 percent. You had health care. You said it was critical to our economic security. The Fed did its thing before it backed out. You went after housing policy. None of them have really stemmed the tide, the decline in the housing market.

SEC'Y GEITHNER: I, I told you yesterday that the -- let me stop you there again.

MR. GREGORY: Yeah.

SEC'Y GEITHNER: The American economy was falling off the cliff in the fall of '08 and the first months of his administration. And he put in place the most creative, the most forceful set of economic measures we have ever done as a country. And because of that, we've prevented a second Great Depression and the economy has now been growing for more than a year and a half, more than two million jobs in the private sector since job creation started again. Faster job creation than the last two recoveries. Now, things are very hard still, and we're not growing fast enough, and the president of the United States is going to keep at it to make sure that every day we're looking for more opportunities to get the economy moving again faster. But he can't do that alone. It does require Congress, under our Constitution, to be willing to legislate things that would help. Like, for example -- and you, you know these examples -- if we could pass some trade agreements to expand export growth, that would be good. If we could find ways to help rebuild America, we can put more people back to work. If we can figure out ways right now to extend these tax benefits for 98 percent of working families, that will help for confidence.

MR. GREGORY: When do you think recovery is actually going to start feeling like recovery?

SEC'Y GEITHNER: Oh, I think it's going to take a long time still. This is a very tough economy. And I think for a lot of people...

MR. GREGORY: Yeah.

SEC'Y GEITHNER: ...it's going to be -- it's going to feel very hard, harder than anything they've experienced in their lifetime now, for some time to come. And that -- but that is because that is the tragic effects of a crisis this deep and this bad caused by a long period of lost opportunities to do things to make the country stronger.

MR. GREGORY: Before you go, your future. Will you stay as treasury secretary for the balance of the president's first term?

SEC'Y GEITHNER: David, as I said, and I think I said this to you before, you know, I've got a lot on my plate, and I got a lot ahead of me, and I'm going to be doing this for the foreseeable future.

MR. GREGORY: For the remainder of his first term?

SEC'Y GEITHNER: For the foreseeable future.

MR. GREGORY: So it could be less than that.

SEC'Y GEITHNER: Well, foreseeable is, you know, a complicated word.

MR. GREGORY: Yeah. Would you, would you leave, though, before an election campaign?

SEC'Y GEITHNER: David, I'm not going to make news for you on this today. I've said to you before, you know, when, when I decide, you know, I'll let you know.

MR. GREGORY: I'll be like among the first 10 or 15 people to know.

SEC'Y GEITHNER: Yeah, maybe not in that list.

MR. GREGORY: Yeah, OK. Mr. Secretary, as always, thank you very much. And coming up, our Meet the Candidate series continues as the race for the White House heats up. One of the first candidates to get in the race approaches a critical test in Iowa next month. Former Minnesota Governor Tim Pawlenty joins me live in studio right after this break.

MR. GREGORY: Coming up, he was a two-term Republican governor of Minnesota, now he has his sights set on the White House. GOP presidential hopeful Tim Pawlenty joins me live in studio. It's up next, right after this brief commercial break.

MR. GREGORY: We're back. Our Meet the Candidate series continues this morning with former Minnesota Governor Tim Pawlenty. Welcome back to MEET THE PRESS.

GOV. PAWLENTY: Thanks for having me, David.

MR. GREGORY: Good to see you, Governor. I, I want to just get a headline reaction from you here. You just heard the Treasury secretary talking about the economy saying, "Look, Republicans don't have a choice. Raise this debt limit or America's credit rating is in danger." Can I get reaction to that, and then we'll get back to the economy?

GOV. PAWLENTY: Well, sure. But he said something else, David, that I think is important. He was blaming President Bush, blaming the weather, blaming the Republicans. We're almost three years into this administration. President Obama should look in the mirror to see who's to blame for the economy in its current state, and it's not doing well. And as to the debt ceiling...

MR. GREGORY: Why is he to blame? Are you suggesting the president's to blame?

GOV. PAWLENTY: Of course.

MR. GREGORY: Why?

GOV. PAWLENTY: Well, he's the leader of our country, and he's the person who sets the tone and tempo and vision for our country, including economic policy. And he's doing things that are suffocating the private economy instead of doing those things to grow the economy, like cutting taxes, shrinking government, and doing the things that the job providers say would actually make a difference, which is get the government off their backs.

MR. GREGORY: Let me stop you on that point. I'm curious, though, as a Republican who believes in basically boilerplate Republican economic philosophy, right? Cut taxes, cut regulation. Even in economic boom times, the past 30 years, middle class wages have not increased. As a Republican, what are you going to do about that?

GOV. PAWLENTY: We've got to get the private economy going. And how, how's the Obama approach working? When he ran for president of the United States, he went around the country, made all these grand promises, this soaring rhetoric. He got to implement his plan, a stimulus bill, 800 plus billion dollars. He said unemployment could go up to 8 percent if they didn't pass it. Now, how's it working? The answer is it's not. He's got an -- we've got an unconstitutional healthcare bill. We've got tax policy and regulatory policies that our private businesses are saying are suffocating their entrepreneurial spirit and their desire to grow jobs in this country. And he's got us on the wrong track. You've got to do the things like I did in Minnesota: cut taxes, you've got to bring down spending, you've got to get those things in line with respect to health care that are going to bring down costs, not just expand access and the like. Those are the kinds of things that the people who actually know what they're talking about, who are providing jobs in this country, would say would make a difference.

MR. GREGORY: Let's come back to the economy in a couple of minutes. I want to ask about the state of your campaign because, frankly, by most accounts, it's not doing very well. Here's how The New York Times put it on Friday, the headline, "Will Republican Race's First In Be The First Out? Pawlenty, Seeking to Regain Momentum, Plants His Nomination Hopes Squarely in Iowa." Are you on the ropes here at this early time?

GOV. PAWLENTY: Well, I just announced my campaign six weeks ago, so I think it's a little early for that. But, more importantly, these early polls are not a good indicator of anything. If they were, Rudy Giuliani or Hillary Clinton would be president of the United States. They almost never predict the outcome. And when people get to know my record in Minnesota of, you know, reducing taxes, cutting spending, doing healthcare reform the right way -- no mandates, no takeovers -- doing public employee pension and benefit and pay reform and the like, I think my campaign will do quite well.

MR. GREGORY: Well, when you talk about Iowa, where the caucuses are, you're traveling there a good deal now. You've said this week, "We're going to make an earnest effort here and really try to boost recognition." Des Moines Register poll June 19th through the 22nd, we'll put

it up on the screen, it shows the top people there: Romney, Bachmann, your fellow Minnesotan, you're down at 6 percent. Then there's the question of money, money raised. That's really critical at this early time to build momentum and the stats on that, not as promising here. In the first quarter, you're at 4.2 -- second quarter, rather, you're at 4.2 million. What gives?

GOV. PAWLENTY: Well, again, the early polls are not good predictors of anything. Once people get to see my record of executive leadership and results...

MR. GREGORY: You've been to Iowa a lot, though.

GOV. PAWLENTY: Well, but...

MR. GREGORY: Among the most frequent visitor, except for Rick Santorum, in the Republican field.

GOV. PAWLENTY: Of course. But most of those visits were for other candidates and other causes. Now we're campaigning in first voice in Iowa. My campaign started just six weeks ago. But again, if -- Rudy Giuliani would be president or Hillary Clinton would be president or Howard Dean would be president if these early polls meant anything.

MR. GREGORY: Here's something from the Los Angeles Times that's about style, frankly.

"Tim Pawlenty's presidential campaign rests on this question: Will Republican voters itching for confrontation with President Obama deliver their nomination to a man who tends toward sort-spoken and bland?" Are you too dull to be president?

GOV. PAWLENTY: Well, look, if people want the entertainer in chief, they should vote for somebody else. But we've had three years of a president of soaring rhetoric, gave all these false hopes and false promises to the country. If you want somebody who's had executive leadership, who has not just rhetoric, but results on taxes, on spending, on health care, on jobs and the like, then vote for me. And the other thing I would say, David, I've got the record of toughness better than anybody else in this race. My goodness, I was the first governor in Minnesota's history to shut down the government. I set a record for vetoes. I took more money out of the budget using an executive authority than all the other governors combined in my state. So in terms of...

MR. GREGORY: Let me just stop you there for a second...

GOV. PAWLENTY: So in terms of demonstrating fortitude...

MR. GREGORY: Right.

GOV. PAWLENTY: ...I'm an old hockey player. I've been in more fights than the rest of these candidates combined.

MR. GREGORY: Well, that's great that you've got a fighting spirit, but look at how the American people are looking at Washington right now. We nearly had a government shutdown. We can't have a deal on, on cutting the debt because the town is so politically polarized. Do you think the fact that you shut down the government in Minnesota is something to brag about? You think that's what the American people want?

GOV. PAWLENTY: Well, I think what they want is results. And I've got the best results, the best record of any candidate in this race. And when it comes to principle, these dramatic moments, whether they're setting veto records, whether they're shutting down government, you -- we have to have transformational reform in this country. The country is sinking. We need bold and courageous actions. And now is the time for the Republicans to stand up and fight for these values.

MR. GREGORY: When are we...

GOV. PAWLENTY: And the last time they had the majority in Congress, they didn't do that and they got thrown out. And now they need to walk the walk.

MR. GREGORY: What's your marker? I know you've got a marker. What's your marker of something you have to achieve. Is it the Iowa straw poll coming up next month to test whether you're actually a viable candidate?

GOV. PAWLENTY: Well, the Des Moines Register poll, as you just noted, had us in sixth or seventh place. In the next 60 days, we need to show significant progress. I'm confident, in the Iowa straw poll, that we will. And as my record in Minnesota gets out, I think we'll have a campaign that's going to be prevailing, not just in the straw poll, but in the Iowa caucuses and beyond.

MR. GREGORY: Let me ask you about your main challenger, the frontrunner at the moment, Mitt Romney, and his position on health care. In Massachusetts, he passed universal healthcare coverage. This is what you said back in June on Fox News about him.

GOV. PAWLENTY: I don't think we can have a nominee that was involved in the development and construction of Obamacare and then continues to defend it.

MR. GREGORY: So let's be clear here, straight talk, Governor. Are you saying he cannot be the nominee, unelectable as, as the nominee of the party, because of his position on health care?

GOV. PAWLENTY: I think if you're going to prosecute the political case against President Obama and one of the top three or four issues is going to be the direction of the country in health care, it's going to be very difficult for our nominee to be one of the co-conspirators or co- designers of that.

MR. GREGORY: I know that's the argument. I'm asking you what your conclusion is.

GOV. PAWLENTY: It's going to be very difficult for him to be successful with that on his record.

MR. GREGORY: In other words, he can't be the nominee if he's got this background?

GOV. PAWLENTY: I think as we -- it's going to be difficult for him to beat the president with that on his record. And, you know, his record is beyond just health care. It's also a question of how did he do on judicial appointments? Where did we stand on bail outs? So all of us are going to have to account for our record. I've got a record. Governor Romney's got a record. All the other candidates have record. I've got the best conservative record in the race.

MR. GREGORY: You know, we've been talking a lot about Iowa, and I was looking this weekend at an editorial in the Register, and it has, here at the end, this question of how you distinguish yourself from the rest of the field. "In a competitive race," they write, " Pawlenty will need something to distinguish himself." What is that? Where do you -- can you name one area where you break from the Republican Party?

GOV. PAWLENTY: Being a successful leader. Again, I'm not running for comedian in chief, I'm not running for entertainer in chief. If people would like that, they should go to a Broadway show or Las Vegas.

MR. GREGORY: But honestly, Governor, to say I'm a successful leader does not distinguish you. Everybody claims that. That's argument, that's not fact. I'm asking you, bottom line, where would you -- one area where you would break with the Republican Party?

GOV. PAWLENTY: Well, David, for example, over my time as governor, I got a lot of flak from the -- all sides in the debate. One area would be I supported the minimum wage when I was governor. Some Republicans didn't like that. There are times where I differed with my party in other respects. But bottom line is, I've got a record, when you look at this, of accomplishment. There's a bunch of people in this race who have run around, flapped their jaws, but they've never actually done what they're talking about. All the candidates are going to say, "I'm for cutting taxes. I'm for cutting spending. I'm for doing healthcare reform the right way. I'm for conservative judges," and down the list. But I've actually done these things.

MR. GREGORY: Well, what about fellow Minnesotan Michele Bachmann? She's beating you in the polls, she's got more traction coming out of that recent debate and in Iowa. You're a nice guy, you say you're not going to, you know, speak disrespectfully of a fellow Minnesotan. But this is about, again, distinguishing yourself from others in the field. What makes you different than Congresswoman Bachmann?

GOV. PAWLENTY: Well, I like Congresswoman Bachmann. I've campaigned for her, I respect her. But her record of accomplishment in Congress is nonexistent. It's nonexistent. And so we're not looking for folks who, you know, just have speech capabilities, we're looking for people who can lead a large enterprise in a public setting and drive it to conclusion. I've done that, she hasn't.

MR. GREGORY: Do you think she's too controversial? She has said on this program and elsewhere that this is a gangster government. She thinks the president has un-American views. Do you think that reflects a temperament that's not suitable for the presidency?

GOV. PAWLENTY: Congresswoman Bachmann and I are -- you know, share many of the same issue positions. We're both conservatives. I think the main difference is this, I've got executive leadership in a public setting with a record of accomplishment and results under difficult and challenging circumstances, and she has served in Congress. And in that regard, her record of accomplishment is, you know, like I said, nonexistent.

MR. GREGORY: Well, what about my question? Do you think it's appropriate to describe the federal government as a gangster government, this administration as a gangster government?

GOV. PAWLENTY: Well, everybody's got different rhetoric that they use. The federal government's out of control. Let's face it, it's plain for everybody to see. So whether you call it a gangster government, out of control, reckless, irresponsible...

MR. GREGORY: You think those are all the same things?

GOV. PAWLENTY: Well, they're similar. But, you know, I've used similar terms.

MR. GREGORY: And so you think that's appropriate?

GOV. PAWLENTY: A gangster government?

MR. GREGORY: Yeah, to call the president, the administration a gangster government?

GOV. PAWLENTY: Well, I've called it incompetent, I've called them out of control, I've called them misguided, I've called them failed. I mean, pick your choice. But the point is, this is a group of people who are disconnected from the economic needs of the people in this country. People are hurting. We've got nearly $4 a gallon gas, we've got crushing levels of unemployment. We have a federal government that's out of control.

MR. GREGORY: Yeah.

GOV. PAWLENTY: And we have a president who has no clue.

MR. GREGORY: So what would you do right now as president. Here we have these debt negotiations going off the rails. What would you do right now to bring this deal home?

GOV. PAWLENTY: Well, first of all, you know, they shouldn't have gotten in this position in the first place. How did we get here? President...

MR. GREGORY: Well, that's fine, but we're -- that's fine. But that -- but we're here.

GOV. PAWLENTY: President Obama exponentially made the deficit worse and the debt worse. I mean, he's essentially tripled it. In March of 2009, David, he looked the American people in the eye and said, "I will cut the deficit in half during my first term."

MR. GREGORY: Well, let's not forget, his Republican predecessor did all the TARP, did all the bailout spending and ran up the deficit.

GOV. PAWLENTY: Yes.

MR. GREGORY: So, I mean, there was a period of time where Republican or Democrat likely would have responded the same way.

GOV. PAWLENTY: Well, but let's put the numbers on that. When President Bush left office, the deficit was around $500 billion a year or so, and now it's $1.5 trillion or so. So President Obama has tripled it when he promised to cut it in half.

MR. GREGORY: All right, but let's bring this to here and now, OK?

GOV. PAWLENTY: Yeah, here and -- on the deficit...

MR. GREGORY: What do you do here to get a deal? Because there's a -- there was a deal on the table here, $4 trillion in spending cuts.

GOV. PAWLENTY: Yeah.

MR. GREGORY: That's a lot of money. That's quite an accomplishment for Republicans who have been driving that.

GOV. PAWLENTY: Well, I've supported this approach. Look, we need structural, real permanent change. So obviously, the long-term device and my goal should be to get a constitutional amendment to balance the budget. That's going to take some time, so you need some intermediate strategies to peg spending going forward to a percent of GDP so that we have that capped. And in the near-term, you've got to do real reform in spending reductions. And I've got the most detailed plan of any candidate on the race on the table.

MR. GREGORY: Well, here...

GOV. PAWLENTY: And I'd add one more thing: Get the economy growing.

MR. GREGORY: Right.

GOV. PAWLENTY: This isn't just about cutting everything. You know, I got criticized for having an aggressive economic plan. We need an aggressive economic plan. We have to get this economy growing if we're going to get out of this hole.

MR. GREGORY: But what about the question of what you have to be willing to cut or willing to raise? This is what David Brooks wrote in his column, I'm sure you've seen this week, about

the Republican Party: "The struggles of the next few weeks are about what sort of party the GOP is a normal conservative party or an odd protest movement that has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation. If the debt ceiling talks fail, independent voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don't take control, independents will conclude that Republican fanaticism caused the default. They will conclude that Republicans are not fit to govern. "And they will be right."

GOV. PAWLENTY: Well, with all due respect to, to David Brooks, this is not the time for Rockefeller Republicanism. We've got a country that is sinking. We've got a country that is on the verge of a crisis in the debt ceiling issue, and that's just one symptom of much larger problems. And so, if the answer is just to split the difference with the Democrats and be for tax increases, be for more spending, but just a little less than the Democrats, that's not what I believe.

MR. GREGORY: But that's actually...

GOV. PAWLENTY: That's what Barack Obama believes.

MR. GREGORY: But that is not factual. That's not the deal on the table. There was an opportunity for $4 trillion in spending cuts, a few hundred billion dollars in terms of revenue increases. But there is this purity test which is no tax increases, no revenue increases at all. The Treasury secretary says that's just not a balanced approach. Is that good governing for Republicans who control the House to say, "Sorry, no tax increases period," even when they're looking at getting potentially $4 trillion in spending cuts?

GOV. PAWLENTY: Well, David, we don't know what the deal was because we haven't seen the details. But if you look at how we got in this mess, and you look at the growth of the private economy, and you look at the relative growth of government spending vs. the growth in, in tax revenues...

MR. GREGORY: Mm-hmm.

GOV. PAWLENTY: ...the revenues are not what's out of balance. It's the spending that's out of balance. You can't be a fair-minded person and say look at this thing over the last 10, 20 years and say that it is the revenues that have somehow not kept pace with the private economy. What's happened is government spending has gone up way beyond that. That's how we got in the hole.

MR. GREGORY: But...

GOV. PAWLENTY: So you have to define balance in context.

MR. GREGORY: All right, but are you saying -- would you be open to any revenue increases if it would help you get a deal on the scale of trillions of dollars of spending cuts?

GOV. PAWLENTY: The United States federal government is not undertaxed. It spends too darn much.

MR. GREGORY: So your answer is no, you would not entertain that.

GOV. PAWLENTY: That's, that's right. We shouldn't raise taxes.

MR. GREGORY: So even if it means that the debt ceiling is not raised?

GOV. PAWLENTY: That's the approach I took in Minnesota. We have to draw the line in the sand. That's why I shut down government in Minnesota.

MR. GREGORY: You're willing to face the credit rating dropping and the catastrophic effects that the Treasury secretary describes?

GOV. PAWLENTY: What I'm willing to do is tell the president of the United States that if he wants the debt ceiling raised, then he should do those things I described earlier. And he's the one who should slow down the spending and get the thing back under control. The reforms that I mentioned earlier are the right reforms, and there -- there's no objection to them in terms of the president's willingness or desire, I should say, to do those, and he won't do them. But why, why is he opposed to a constitutional amendment to balance the budget? Why would he be opposed to that?

MR. GREGORY: Mm-hmm.

GOV. PAWLENTY: Why would anybody be opposed to that? So why can't we ask President Obama to come in that direction? He's the one who is supposed to set the tone and the tempo for this country, and he's not doing it.

MR. GREGORY: Do you support Paul Ryan's approach to Medicare?

GOV. PAWLENTY: I've said, look, if...

MR. GREGORY: Changing it into a voucher program or premium support program?

GOV. PAWLENTY: As between President Obama's plan, which is doing nothing, and Paul Ryan's plan, if that bill came to my desk, I'd sign it. But I have my own plan, and it's different in some respects than Congressman Ryan's plan.

MR. GREGORY: I want to do just a few foreign policy notes. We've only got a few minutes left, and I'll, I'll go through them. First, on Libya, you've said, "Look, we got to get Khaddafy out of there. I'd go in there and I'd get him out." Would you send ground troops to Libya at this point?

GOV. PAWLENTY: Not necessarily. You look at what President Reagan did, for example, to remove the governments in certain areas. You don't necessarily have to send in ground troops. When the rebels had Khaddafy on the ropes in the early days, in the early hours of this, had taken over most of the country geographically, he was openly talking about leaving. If the president in that moment would have been decisive and strong and threatened or imposed the no-fly zone, my view is you should have -- we could have toppled Khaddafy then.

MR. GREGORY: That sounds like...

GOV. PAWLENTY: Instead...

MR. GREGORY: That sounds like a different reading of what the situation was at the time.

GOV. PAWLENTY: No, I don't...

MR. GREGORY: Tripoli always seemed difficult to get, and now by their own -- the rebels' estimation, Tripoli would be hard to take.

GOV. PAWLENTY: Well, David...

MR. GREGORY: And by the way, how do you do it without ground troops?

GOV. PAWLENTY: ...and he dithered, he, he dithered for three or four months.

MR. GREGORY: Well, that's fine. Well, OK, but I'm asking you now.

GOV. PAWLENTY: But look...

MR. GREGORY: What would you do? You say we should go in and get Khaddafy.

GOV. PAWLENTY: Here's what I would tell.

MR. GREGORY: Easy thing to say as a candidate. What would you do?

GOV. PAWLENTY: Yeah. This...

MR. GREGORY: You say no ground troops?

GOV. PAWLENTY: Not necessarily.

MR. GREGORY: Well, what's the not necessarily part? How else do you do it?

GOV. PAWLENTY: I would tell Khaddafy this: You can go the easy way or you can go the hard way, but now you're going. He just got indicted by an international tribunal for war crimes, or the equivalent of war crimes. This is a man who has American blood on his hands. He killed Americans. He's a terrorist. This is somebody who Ronald Reagan tried to kill in the 1980s.

MR. GREGORY: I understand that, but I'm asking how. I'm asking you to back up how.

GOV. PAWLENTY: The United States of America has the ability to find and hunt down and bring to justice Moammar Khaddafy.

MR. GREGORY: So special forces. You're saying send in special forces if necessary.

GOV. PAWLENTY: Well, if you wanted to, you could kill him with a cruise missile, if you wanted to. If you wanted to, you could bring in special forces and target it. The idea that we can't find and kill Moammar Khaddafy or bring him to justice is ridiculous.

MR. GREGORY: One on Afghanistan. Defense Secretary Panetta was in Afghanistan, he said

this: "I'm convinced that we're within reach of strategically defeating al-Qaeda." Do you agree?

GOV. PAWLENTY: Well, the person who said that is somebody who's got a lot of knowledge, so I'd give that deference. But you look at Afghanistan, for example, the...

MR. GREGORY: That's a big accomplishment, is it not?

GOV. PAWLENTY: We -- yeah, sure it is.

MR. GREGORY: Do you give credit to President Obama for how he's, how he's taken on al- Qaeda?

GOV. PAWLENTY: Well, he's made some good decisions in that regard, finding and killing -- or bin Laden was a good decision...

MR. GREGORY: Osama bin Laden.

GOV. PAWLENTY: ...good leadership action. But we still have a lot of work to do. This is going to be a multiyear, multidecade commitment, and it's not over yet.

MR. GREGORY: Let me ask you about social policy. You've notably said that you're a big fan of Lady Gaga, and even the song "Born This Way." There's a lot of debate about a gay marriage pledge in Iowa. And related to that, I wonder, do you agree with some of those who are behind that, that being gay is a choice?

GOV. PAWLENTY: Well, I have two teenage daughters who listen to Lady Gaga, so I'm subjected to it. And it has some good qualities to it. But as to, as to gay marriage, I'm in support of traditional marriage as between a man and a woman. I have not supported the issues of allowing gay couples to have the same benefits and public employment as traditional couples. And so this is an issue in Iowa and across the whole country. But I've stood in favor or traditional marriage and traditional relationships in that regard.

MR. GREGORY: Is being gay a choice?

GOV. PAWLENTY: Well, the science in that regard is in dispute. I mean, the scientists work on that and try to figure out if it's behavioral...

MR. GREGORY: Right.

GOV. PAWLENTY: ...of if it's partly genetic.

MR. GREGORY: What do you think?

GOV. PAWLENTY: Well, I defer to the scientists in that regard.

MR. GREGORY: So you, you think it's not a choice.

GOV. PAWLENTY: Well, there is no...

MR. GREGORY: That you are, as Lady Gaga says, you're born that way.

GOV. PAWLENTY: There's no scientific conclusion that it's genetic. We don't know that. So we don't know to what extent, you know, it's behavioral, and that's something that's been debated by scientists for a long time. But as I understand the science, there's no current conclusion that it's genetic.

MR. GREGORY: All right, Governor Pawlenty, lots more debate to come. We'll be watching on the campaign trail. Thank you very much.

GOV. PAWLENTY: OK, thank you.

MR. GREGORY: And coming up, the politics of the debt fight. We've been talking about it. What's at stake? What does it mean for 2012? Plus, a look at how the rest of the Republican field is now shaping up. Analysis from The Washington Post's Eugene Robinson and NBC's Chuck Todd right after this.

MR. GREGORY: We're back, joined by our roundtable political director and NBC News chief White House correspondent Chuck Todd, and columnist for The Washington Post Eugene Robinson. Welcome to both of you. Well, a lot of news to go through here from our discussion so far. But let's start with our Meet the Candidates, Chuck.

MR. CHUCK TODD: Sure.

MR. GREGORY: As we look at the Republican field, Tim Pawlenty. He obviously came on this morning with a purpose. He's got to raise some visibility, he's got to raise money, and you heard him say Iowa's key now -- not the caucuses, but the straw poll.

MR. TODD: Yeah, and his chief rival's a fellow candidate form Minnesota.

MR. GREGORY: Yeah.

MR. TODD: That's who -- it, it felt to me as he was no longer running against Mitt Romney. He's almost running against Michele Bachmann because she's the one stealing all the tea party thunder, she's the one stealing all the grassroots thunder. And, oh, by the way, she's from his home state. And, you know, he went a little harder on her, and it's the first time we've heard anybody really go hard at Michele Bachmann...

MR. GREGORY: Right.

MR. TODD: ...in this campaign.

MR. GREGORY: Gene, he said her record in Congress is nonexistent.

MR. EUGENE ROBINSON: Right. Which, which I thought was, was amazingly tough, you know, given the Republican commandment. But, look, she's the one who can knock him out of this race, basically...

MR. GREGORY: Mm-hmm.

MR. ROBINSON: ...by, by beating him in Iowa. And his campaign has not taken off, he's, he's down 6 percent in the polls, he's -- you know, the $4.2 million is not -- does not give you confidence that he can really pull this off. So he's got to catch fire. He's got to make stuff happen. And to do that, he's got to get rid of her.

MR. TODD: But, David. He's going down the only path he can. I mean, this is it. The fact is, he's right. He's got to finish first or second. You know, in the straw poll four years ago, first, first place was Mitt Romney, you know, second place was Mike Huckabee, third place was Sam Brownback and Sam Brownback didn't finish the campaign. Third place is the Glengarry Glen Ross role, "You're fired."

MR. GREGORY: Right, right. Now, he was more critical of Romney and being rather clear, saying he would not -- he would have a hard time against Obama having supported health care. But on the debt business, it's really quite interesting, I mean, willing it seems like to go with the most conservative line, which is, you know, "Default be damned, we're going to keep opposing."

MR. TODD: Don't, don't think this presidential campaign that's going on right now didn't have an impact on this.

MR. GREGORY: Sure.

MR. TODD: Because John Boehner knows, not only is he feeling it from his flank with Eric Cantor and the tea party flank inside his own caucus, but whatever deal he cut, if he looked like he was doing a grand bargain and somehow basically elevating President Obama, he was going to get maligned on the presidential campaign by everybody.

MR. ROBINSON: I don't, I don't think there's a single Republican candidate who is cut -- who is cutting him any slack actually.

MR. TODD: Yeah.

MR. GREGORY: Yeah.

MR. ROBINSON: Any slack at all on this deal.

MR. GREGORY: Well, I want to come back to that in a second. Let me do one other political note because Sarah Palin is being heard from again -- cover story in Newsweek. And I want to pullout the portion where she talks about her prospects, which is quite interesting. We'll get that together and put that up on the screen. Again, granting an interview to Newsweek. "I can win." She says, "The people of America are desperate for positive change, and deserving of positive change ... I'm not so egotistical as to believe that it has to be me, or it can only be me, to turn things around. But I to believe that I can win." What is she up to here, Chuck?

MR. TODD: I'm not going to pretend -- we never -- to try to crawl inside and see if she's going to do things predictably the way other presidential candidates do is a mistake. It feels like she is simply trying to go out on her own terms. You know, she didn't want the Tucson response that she made when she called blood libel and all those things after the Gabby Giffords shooting to be the most -- the lasting impression of Sarah Palin 2011. She wanted to get out -- she wanted -- if she's not going to run, she wants to be able to have that be the message. "I could win, but I don't need it."

MR. GREGORY: But she has this quality of wanting to very much stay on the margins, be a spoiler if that's, if that's the role. But it, it's just completely unconventional.

MR. ROBINSON: It is completely unconventional. I'm not exactly sure, beyond the influence she has now as a, as a kind of gadfly, as a, as a political presence, I'm not sure how this path that she seems to be on gets her any more influence. I'm not sure where it gets her. She hasn't done any of the stuff that you'd -- that you would need to do, traditional or nontraditional, to run for president. I don't think she's running.

MR. TODD: Look, Rush Limbaugh is an incredibly influential figure in the Republican Party, and he could never win the Republican nomination.

MR. ROBINSON: Mm-hmm.

MR. TODD: I think that's where Sarah Palin's coming. She's going to be an incredibly influential figure on a conservative movement in the Republican Party. That's what she wants. And I don't know if she'd get nominated. Look at her numbers among Republicans. She doesn't have the support among Republicans to win this nomination.

MR. GREGORY: Let's come back to the debt fight. Gene, you wrote in your column on Monday about the role that the president is playing as a negotiator, and I'll put a portion of that up on the screen. " Obama's in-your-face attitude seems to have thrown Republicans off their stride. They thought all they had to do was convince everyone they were crazy enough to force an unthinkable default on the nation's financial obligations. Now they have to wonder if Obama is crazy enough to let them." What does he coming into this meeting this afternoon and say?

MR. ROBINSON: I think he, he comes in and says to Speaker Boehner, "Let's, let's think about this again." I think he, he says what Geithner essentially said is that maybe a big deal is easier to get than a small deal. We're -- a small deal is not going to be easy. And he continues to push because, politically, I think the White House thinks this is a winner for them...

MR. GREGORY: Yeah.

MR. ROBINSON: ...to go for the big deal...

MR. GREGORY: The big deal.

MR. ROBINSON: ...to be seen going for the big deal and...

MR. GREGORY: The debt slayer.

MR. ROBINSON: ...then if the...

MR. GREGORY: The president as debt slayer.

MR. ROBINSON: Exactly. And then, if it doesn't happen, well, he tried.

MR. GREGORY: Here...

MR. ROBINSON: So I think he continues to try.

MR. GREGORY: Here's the interesting thing, though, Chuck. I mean, you get into -- this is, this is inside D.C. baseball, right? But that's what you're counted on for here. The president was willing to deal on Medicare because their thinking was that creates space, politically, for the Republicans to do a deal on taxes. So what are the moving pieces there, and why did that break down?

MR. TODD: Well, it broke down because Speaker Boehner couldn't get and agreement on taxes. Let's remember, he was not -- he did not believe he was politically strong enough in his own caucus to remain leader of the House Republicans. Not speaker of the House, leader of House Republicans. So he backed off the deal. He's the one that pushed the president to try to do the bigger deal. He's the one that floated this idea, "OK, we can -- I will try to see if I can get some tax increases, mess around with the tax reform. Let me see if I can do it." Eric Cantor said no.

MR. GREGORY: Yeah.

MR. TODD: And guess what, it's no.

MR. GREGORY: And it looks like, if you listen to Secretary Geithner this morning, and look at all the pieces here, he said, "No, no, we were willing to deal on Medicare. We were willing to deal on Social Security. We were going to stand up to our base and, by the way, do a huge $4 trillion deal." The second Republican has now walked. Cantor and now Boehner. They're getting ready to use this as a stick.

MR. ROBINSON: Uh-huh. Yes. They definitely are. I, I'm fascinated by this Boehner- Cantor relationship, though.

MR. GREGORY: Yeah.

MR. ROBINSON: This is going to really be something to watch going forward because, you know, Boehner was looking for the deal and Cantor kept saying no, kept saying no, kept saying no. Looks like no has prevailed in the Republican caucus, and what does that mean for Boehner's power? What does that mean for Cantor's power? What does that mean for the future? Very interesting.

MR. TODD: Yeah, I'm really fascinated to watch what the president does tonight because, you know, they provided two plans out there. They had their plan B and the Biden plan, and that's what Eric Cantor supports and Jon Kyl supports. So there's their plan B. How much -- how quickly does the president back off? Does he actually say, "No, let's roll that one out too. I really want this big deal. Let's go." Or does he basically back down and show that he was being a tough negotiator for four days?

MR. GREGORY: Right. You know, some of the corporate guys say, well, you know, it takes four or five times, you know, of saying no before you may get to a deal. So we'll see. We'll set up this meeting a little bit more after we take a break. But we'll take a break here, and when we come back, we'll have our trends and our takeaways, a look at what was said here today that was newsworthy and what to look for in the coming week. Plus, what are the hot political stories trending this very morning? It's right after this.

MR. GREGORY: Final moments now with our roundtable here, and I want to go to our hot trending stories this morning, our trend tracker. We'll put it up on the screen for you. Not surprisingly, it's this debt standoff that is still number one, this impasse that we're going to be watching all day. Number two, this conservative marriage, marriage pledge that I talked about with Governor Pawlenty, that's in Iowa. Third is Panetta and that al-Qaeda defeat comment that you heard me ask the governor about. Quickly, Chuck Todd, on this conservative marriage pledge that's, that's getting a lot of traction on the Internet right now about some of the language in the preamble about slavery, when I asked him about what's interesting, which is also part of this...

MR. TODD: Yeah.

MR. GREGORY: ...does he think being gay is a choice, what did you make of the answer?

MR. TODD: Well, it -- I guess he was trying to -- he said the science isn't clear.

MR. GREGORY: Mm-hmm.

MR. TODD: I believe it was something like that. And I-- not to put words in his mouth, I assume he was trying to make it his answer, trying to keep it vague, trying not to take a position. But by bringing up the -- I think it was an odd answer, and I think it's going to be one I think he's probably going to replay in his own head.

MR. GREGORY: All right. Let me review as well, Secretary Geithner, our lead newsmaker this morning, made news on what's ahead on the debt impasse. Watch.

SEC'Y GEITHNER: The president wants to do the right thing for the country and he recognizes to do the right thing, you have to try and do the biggest, most substantial deal possible, the deal that's going to be best for the economy. The credit rating agencies around the world have said if Congress doesn't act by the 2nd, they will put our -- they will downgrade our credit, first time in history, and if that happens, you're going to see catastrophic damage across the American economy and across the global economy.

MR. GREGORY: Gene, ratcheting up the warning to Republicans.

MR. ROBINSON: Ratcheting up the warning. He's also explaining that on August 2nd, this is a real deadline.

MR. GREGORY: Yeah.

MR. ROBINSON: That, that in fact because two days later, T-bills start coming due. It's not just interest, it's interest and principal, and this rolls over week after week after week. And if we can't persuade people to roll over those T-bills, we run out of money. And he made that very clear.

MR. GREGORY: Two other newsier things, he's only with the administration for the foreseeable future, wouldn't commit to the rest of the first term. And two, asked when will recovery start feeling like recovery, he said it's going to take a long time. That's, that's daunting from the Treasury secretary.

MR. TODD: It, it is. And you know, I've been fascinated by the economic talking points from the administration. When you have the president out there saying, you know, it may be better for people to rent rather than own -- he has said that a few times.

MR. GREGORY: Yeah.

MR. TODD: And the Treasury secretary to say, "Boy, it's going to take a while for people to feel the recovery," it's almost -- I guess, they're trying to say, "Hey, look, we're, we're trying to be straight with you, this is what the environment's going to look like for a while." And it is clear that's what they're preparing -- the environment they're preparing to run in, which is going to be a tough one.

MR. GREGORY: And they still are going to try to win this argument about, yes, it's hard now, but, you know, it could've been a lot worse.

MR. TODD: Mm-hmm.

MR. ROBINSON: It could've been worse. It could've been a lot worse. Right.

MR. GREGORY: Which is going to be tough. We're going to leave it there. Thanks to both of you. Terrific analysis. Before we go, remember the popular former first lady Elizabeth Bloomer Ford. We remember her this morning. She passed away Friday at the age of 93. To the nation, she was better known as Betty Ford. And although she was sometimes referred to as an accidental first lady, she lived her life with a great deal of purpose. She became an outspoken advocate for breast cancer awareness and later addiction, after very public battles with both. She was a pioneering role model, founding the Betty Ford Clinic, which became a beacon of hope for those battling addiction. In 2006, she was back in the spotlight as the nation said farewell to her husband, former President Gerald R. Ford. This morning, we say farewell to her, as our thoughts and prayers go out to her family. After memorial services Tuesday in Palm Desert, California, Mrs. Ford will be laid to rest on Thursday in Grand Rapids, Michigan. That is all for today. We'll be back next week. If it's Sunday, it's MEET THE PRESS.